Singapore provides universal coverage for its citizens with multiple layers of care and among its ASEAN peers, it spends the most annually in healthcare on a per capita basis. With the increasing healthcare costs, driven by an aging population and chronic illness cases on the rise, Singapore’s National Health expenditure is expected to increase to $43 billion in 2030.
This is why understanding how healthcare costs impact our personal finances becomes crucial. This guide examines health insurance in Singapore and offers insightful information to assist you in making well-informed decisions.
Individually, we must also be mindful of the potential effects that growing healthcare costs may have on our ability to support our families when we get ill. This is when health insurance can be useful. Health insurance is a type of insurance that helps pay for your medical expenditures, either partially or completely, if you get ill, wounded, or disabled.
How can one differentiate the various kinds of health insurance that are offered? This article will assist you in understanding how health insurance works in Singapore.
Government Subsidies for Healthcare
MediFund is an endowment fund established by the Singapore government. It is intended to assist patients who are still unable to pay their outstanding medical expenses despite obtaining government subsidies and relying on their MediShield Life, MediSave, and cash balances.
The endowment fund’s interest revenue is distributed to qualified healthcare facilities to assist low-income people with medical expenses.
Additional programs like MediFund Silver for the elderly and MediFund Junior for children provide further assistance.
MediSave – Your Medical Savings Account
MediShield Life is a CPF savings account set up for your health care costs and expenses. If you are an employee, a portion of your CPF contributions go into your MediSave account.
MediSave can be used to cover hospitalization, day surgery, certain outpatient costs, and MediShield Life, Integrated Shield Plans, ElderShield, CareShield Life, and supplement premiums.
Types of Health Insurance in Singapore
What is MediShield Life and what does it cover?
MediShield Life is a basic universal health insurance plan that provides lifetime coverage to all Singapore citizens and permanent residents. MediShield Life premiums can be paid in full using MediSave.
MediShield Life benefits: It is designed to cover subsidised treatments in public hospital B2 and C wards, as well as specific outpatient treatments such as kidney dialysis and chemotherapy. Medical expenses incurred in A, B1, and B2 wards of private and governmental hospitals can be partially reimbursed by MediShield Life, subject to claim limits and other restrictions.
Integrated Shield Plans (IPs)
IPs are health insurance policies offered by participating private insurance firms. These provide additional benefits beyond those offered by MediShield Life. IPs offer better coverage for hospital expenditures incurred in public hospital A and B1 wards, as well as normal single-bedders in private hospitals.
Premiums for IPs can be paid with Medisave, subject to extra withdrawal limitations (AWL). Premiums can be paid using MediSave, with cash payments for excess.
IP Riders
IP riders are optional additions to your IP that can further minimize your out-of-pocket medical expenses. They are compensated simply in cash.
Riders offer benefits like a 5% co-payment reduction, a $3,000 co-payment cap per policy year, and increased cancer coverage.
Hospital Cash Insurance
Hospital cash insurance pays you a set amount of money for each day you are hospitalised. The benefits can continue for multiple hospitalisations until the maximum number of days per year specified in the policy is met, or until the policy’s lifetime limit is reached.
Such insurance policies are sold by private insurers, and premiums must be paid in cash.
If you are a company employee, or self-employed individual, or if your employment contract does not contain any paid sick leave or hospitalisation leave, you might consider purchasing a suitable insurance policy that provides hospital cash benefits. This will help supply you and your family with a buffer while you are in the hospital and unable to work.
Critical Illness Insurance
Critical illness insurance offers you a lump sum of money if you are diagnosed with a critical illness covered by the policy. Different insurance may cover various types and stages of illness, but they often cover disorders such as severe malignancies, strokes, heart attacks, and kidney failure.
These policies will also differ in how and when payouts are paid. Some pay the entire amount at once, while others make multiple payments at different times. Some plans only allow one claim before they expire, whilst others allow multiple claims subject to terms and limitations.
Disability Income Insurance
Disability income insurance pays you a monthly benefit if you become disabled due to an accident or disease and are unable to work. It normally pays up to 75% of your monthly wage until the age of 55, 60, or 65.
Such plans can help to replace your income in the long run if you are unable to perform the essential duties of your job due to an accident or illness.
ElderShield / CareShield Life
ElderShield and the improved ElderShield plan (known as CareShield Life) are long-term care insurance plans available to all Singaporeans and permanent residents. They offer financial assistance and coverage if you are severely disabled, as well as long-term care when you are no longer able to care for yourself.
Singaporeans and PRs born after 1980 are covered by CareShield Life, but those born before 1980 are covered by ElderShield and have the option of switching to CareShield Life.
Choosing the Right Insurance
If you are a Singaporean or PR, you are already protected by two universal health insurance policies: MediShield Life and ElderShield or CareShield Life (if you were born in or after 1980). They offer lifelong coverage and may cover pre-existing medical issues.
However, if you want to improve your health insurance coverage, here are some factors to consider first:
- What type of coverage do you currently have?
- What kind of coverage do you and your family need?
- How much is your budget?
Acquiring a health insurance policy that suits your needs and budget limitations is important. It is also essential to understand that some insurance policies may exclude coverage for pre-existing conditions.
Consult a financial advisor for a comprehensive overview.
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